The significance of Bitcoin’s weeks-long trading range is all the more apparent with BTC price reaching one-month highs, according to market analysis.
Bitcoin holders are returning to profit as new data now hints that the Bitcoin price has put in the “foundation” of a macro bottom.
The latest figures acquired from on-chain analytics firm Glassnode show that there is a large swathe of the Bitcoin supply heading “into the black” as BTC/USD surged above $18,000.
Bitcoin Establishes ‘Huge’ Accumulation Zone
After gaining almost 5% in 24 hours, Bitcoin is now back on the bulls’ radar ahead of a crunch US inflation data release. What the impact will be is still uncertain, but the on-chain analysis is now eyeing a more important phenomenon that is already developing on the market.
The latest price uptick has seen a massive amount of bitcoin flip from unrealized loss to unrealized profit – it is now worth more than when it last moved.
In case this means that investors who purchased below the current spot price are in profit, it means that a considerable amount of the BTC supply exchanged hands in a zone between there and recent multi-year lows.
That, in turn, has implications for price performance, as these investors buying in establish formidable price support. Checkmate, Glassnode’s lead on-chain analyst, commented about the data.
“Simple Bitcoin tools like Supply in Profit return massive edge for those who pay attention.”
“What we are looking at is a relatively small price change (~10%), but a massive 13% of all coins returning to profit. This means a foundation of massive capitulation –> accumulation.”
The terms “capitulation” and “accumulation” correspond mainly to classic market cycles, especially that of Wyckoff, which calls for a significant accumulation period after a macro low, which should later result in the market’s next bullish phase.
In terms of the numbers, at over $18,200, 13% of the circulating BTC had returned to profit, as highlighted by Glassnode. The firm reiterated:
Buy Bitcoin Now“The observed sharp move upwards in this metric helps to confirm that a large volume of BTC was acquired between $16.5k and $18.2k.”
Mood Echoes December Highs
Bitcoin at one-month highs, in the meantime, offers a sharp contrast to post-FTX chaos in terms of profitability. Based on previous reports, in the wake of the FTX meltdown, holders were sitting on more than 50% of the supply in an unrealized loss.
That picture barely improved in subsequent weeks, with Bitcoin’s realized cap drawdown nearing the bear market bottom territory.
In December, at a time when Bitcoin last traded above $18,000, Philip Swift, co-founder of trading site Decentrader, was nevertheless already suggesting a move from capitulation to accumulation.
